27th Feb 2015 12:01
(An item published at 1031 GMT incorrectly stated the year-earlier figure in the second paragraph. The correct version follows.)
LONDON (Alliance News) - Craven House Capital PLC Friday said it swung to a pretax loss in the first half of its financial year, mostly as a result of the write down of its holding in Pressfit Holdings PLC.
The company posted a pretax loss of GBP545,000 for the half year to end-November, compared with from a pretax profit of GBP518,000 a year before, as a result of a GBP469,000 negative return on its gross portfolio. The net asset value of the company's holdings reduced to GBP5.0 million in the half year from GBP5.5 million as a result of the write-down.
Craven said it was disappointed in the decrease in net asset value, and said whilst it does not believe the market value represents the intrinsic value of Pressfit it does believe it was appropriate and prudent to write down the holding.
The company said that during the period Pressfit had suffered "from both a lack of operational performance, mismanagement and market apathy." Following the period PRessfit was de-listed after its nominated adviser Daniel Stewart & Co lost its nomad authorisation and was unable to secure a new nomad in time.
"We were very frustrated with these events. We have voiced our frustration and displeasure to the company and are presently working with the other large shareholders, one of which is an industry leader, to restructure the management and move the company forward," Craven said.
The company had written down its investment in Farm Lands of Africa Ltd at the previous year-end in May due to the outbreak of Ebola making operations in the are where its leases were located impossible.
"We do believe once the country begins to recover from the Ebola outbreak there will be opportunity to renegotiate the leases and resume operations. We cannot be certain any developments will materialise but we are optimistic," Craven said.
Craven said it had evaluated several potential investments during the period, and continues to look at acquisitions. It spend "significant time and considerable effort" on one particular transaction, but it did not materialise because it "simply could not get comfortable with the margin of safety we require to commit capital."
Shares in Craven House are trading down 13.8% at 0.250 pence Friday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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